China sprung its surprise on global markets on the eve of
its New Year's holiday, increasing bank reserve requirements
for the second time this year in a move that shows it is intent
on curbing bank lending and inflation. [ID:nTOE61B069]

"There's the concern that rate hikes in China will slow
economic growth there and therefore demand for commodities will
be affected," said Paul Taylor, chief investment officer at BMO
Harris Investment Management Inc.

"From a Canadian market perspective that certainly is the
reaction. From the broader perspective ... that means concern
about slower growth for the global economy."

Another big name dragging down the market was Canadian life
insurer Manulife Financial MFC.TO, down 1.7 percent at
C$18.84. Manulife and Sun Life SLF.TO, which fell 1.4 percent
at C$29.97, reported disappointing results on Thursday.
[CA-RCH]

The index's move lower was in stark contrast to Thursday's
rally in which it touched its highest level in a week as a
European Union rescue plan for debt-laden Greece helped lift
market confidence and commodity prices.

On the upside, Research In Motion RIM.TO climbed 1.8
percent to C$74.20, after RBC raised its rating on the
company's stock to "top pick" from "outperform".